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/lp/university-of-chicago-press/climate-change-impact-on-economic-growth-regional-climate-policy-under-nyoO1Cl8v9
- Publisher
- University of Chicago Press
- Copyright
- © 2023 The Association of Environmental and Resource Economists. All rights reserved.
- ISSN
- 2333-5955
- eISSN
- 2333-5963
- DOI
- 10.1086/722274
- Publisher site
- See Article on Publisher Site
Abstract
We develop a novel analysis of climate change and policy regarding climate damages to growth under regional cooperation or noncooperation. We introduce a new stylized climate module and compute the regional social cost of carbon (SCC) when climate change impacts the growth rate of regional GDP under cooperation and noncooperation between regions. We find that in the presence of climate damage to economic growth, the regional SCC is high in either a cooperative or a noncooperative world, implying that it is optimal for each region to choose stringent climate policies. Moreover, relative to cooperation, noncooperation reduces the GDP of countries in both high northern latitudes and the tropics, while the loss for developing countries in the tropics is especially significant. The welfare losses to the tropics are larger still in the absence of compensatory transfers from wealthier regions most responsible for climate change.
Journal
Journal of the Association of Environmental and Resource Economists – University of Chicago Press
Published: May 1, 2023